mortgage

After all that’s happened in the past half-decade, why can’t economists pry themselves out of their spreadsheets, open a window, and look around? The housing bubble took an extraordinary toll on American households, but economists have yet to meaningfully grapple with its impact.
[Read More]

Despite the bailouts and the free line of credit from the Fed’s discount window Wall Street’s troubles are getting worse. JP Morgan’s $7bn (and still climbing) trading loss reminds us that old habits die hard. The number of companies listed on the major exchanges has dropped by nearly half over the past fifteen years. In spite of the rise of high-volume computer trading, average volume on the NYSE has been diving since 2007. Much of the remaining volume is going into so-called ‘dark pools’, private, unpublished markets where brokers go to execute trades that won’t impact the public price of a security. Dark pools now account for more trading volume than the New York Stock Exchange.

As the public exchanges lose their attractiveness more heavy-hitters are investing in private equity. The rise of private equity firms, the scrap dealers of finance, is a telling sign of what’s to come.